Difficulties in Reorder point calculation

Hi,
I know there are number of posts in the forum on this topic. But I could not find my answer in them.
So please help me understand the reorder point SAP is calculating.
I have a material with following data:
MRP type = V2 (Automatic reorder point calculation)
Planned delivery time = 3 days
GR processing time = 0
Safety stock = 0
Service level = 0
Forecast model = G (Moving average model)
Period indicator = W
Historical period = 9
Forecast period = 1
Consumption values = 3,4,5,6,7,8,9,10,11
SAP gives me the result as below:
Forecast = 7 (Matches with my calculation)
Safety stock =0 as service level not maintained (I agree)
Reorder point = 6
My calculation is, reorder point = SS+ forecasted requirement during replenishment lead time
= 0 + 7 * (3/7) = 3
Why SAP has calculated 6 instead of 3 ?
Thanks in advance.

Thanks Jurgen.
I have found the issue. The 'Procurement time' was defined as 1 day in customizing of CBP. This was causing the issue.
Thanks to all of you who replied to the thread.

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Safety stock and Reorder point calculation in inventory planning

Hi,
How System does the calculation of own safety stock, and Reorder point, maximum safety stock level at parent and child location while running inventory planning services in SAP APO SPP. does anyone about the calculation please let me know
Regards
Puneet

Hi,
How System does the calculation of own safety stock, and Reorder point, maximum safety stock level at parent and child location while running inventory planning services in SAP APO SPP. does anyone about the calculation please let me know
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Automatic reorder point calculation

I would like to confirm the formula for calculating a reorder point in SAP.
As I understand it, the simple formula is safety stock + average requirements * lead time.
I have the following settings for a material:
MRP Type - V2
Lot size - HB
Maximum stock level - 500
Total lead days (including GR processing) - 30
Service Level - 98%
Procurement type - F
Historical periods - 2
Forecast periods - 2
Period Indicator - M
Forecast Model - G (Moving average)
Consumption values - 12/2010 - 160
11/2010 - 190
When I execute the forecast run, the get the following result:
Basic Value - 175
MAD - 15
Safety Stock - 39
Reorder point - 219
If the formula for calculating reorder point is - 39 (safety stock) + 175 (average requirement) * (30(lead time)/30(forecast period in days), then the reorder point should be 214. Why does the system output 219?
I read somewhere that a SAP note exists for correcting the calculation, can anyone confirm?
Many thanks.

Dear
Automatic calculation of reorder point RP : The reorder point will be calculated with following formula :
RP = average consumption during LT + SS
SS = R x Sq root ( ( LT(d) x 7 ) / FCperiod(d) x 5 ) x MAD
In your case , ROP will be calulated as per your consumption for November with 20 days having consumption of 190/m and December for 10 days having consumption of 160 /month
So Reorder Qty = 190(20/30)+160(10/30)+39 =219
Refer our earlier posting on the same : Detail the safety stock calculation
Regards
JH

Auto.Reorder point calculation based on service level-calculation incorrect

Hi
I have gone through all the postings pertaining to this topic.Still I am not getting the calculation steps despite of using the same proposed in many of the threads.
My calculation and system calculation as follows:
Service level maintain in MRP2 view was 99.8, so R factor must be 4.00 as per the chart given in sap help.
Planned delivery was 10 days. Material is externally procured. No GR processing time. Schedule margin key was also 000.
Forecast was executed for next 3 months based on past history of 12 months. (Moving average method).
Forecast values for 03.2010 = 140, 04.2010 = 140, 05.2010 = 140.
MAD calculated by system and shown while executing forecast in material master was 48. Safety stock calculated by system was 108 and re-order point was 157.
Since lead time is shorter than forecast period, SS = RWMAD = 4(10/31)48 = 61.94
W = Lead time in days/Forecast period in days.
LTC (Lead time consumption) = 140*10/31 = 45.16
ROP = SS + LTC (lead time consumption) = 61.94 + 45.16 = 107.
Where as system proposal was 157.
Kindly throw some light where is the problem.
Thanks in advance.

Hi
It would be grateful if somebody throws light on the above scenario.

Regarding reorder point planning.

Hi experts,
I have entered safety stock as 40 pcs., reorder point 50 and created requirement for
may 09 - 30 pcs.
jun-09 - 30 pcs.
After executing MRP run it is showing planned order for 50 pcs. only.
But the requirements are not covered I mean to say at last the available qty should be zero.
Please help me on this immediately.
Rgds,
Parul.

In Consumption based planning(re-order point planning), planned independent requirements or dependent requirement will not be considered in the net requirements calculation. Instead, it is triggered when stock levels fall below a predefined reorder point .So, all the planned independent or dependent requirements in a certain period of time should have been considered before setting the reorder point
Therefore, these planning procedures are used in areas for planning both B- and C-parts and operating supplies.(low value materials, but consumption is more)
In reorder point planning, SAP checks whether the available stocks are below the reorder point that has been set for the material. If they are, SAP will create procurement proposal.
We can determine the reorder point manually (u201CVB-Manual reorder point planningu201D MRP Type in standard SAP R/3) or, it can also be calculated automatically using the material forecast (u201CVM-Automatic reorder point planningu201D MRP Type in standard SAP R/3).
In standard SAP R/3 system, besides u201CVB u2013 Manual Reorder Pointu201D and u201CVM u2013 Automatic Reorder Pointu201D MRP Types, there are also other MRP Types that have reorder point as its basis to calculate requirement with additional procedure which count external requirement (sales order and manual reservation) as a requirement. The MRP Type are: u201CV1-Manual reorder point with external requirementsu201D and u201CV2-Automatic reorder point with external requirementsu201D.
If you want to include requirements in the reorder point calculation in addition to the customer requirements and manual reservations,
go to SPRO ->Materials management ->consumption based planning ->master data -> MRP Types
Select the mrp type v1 and
select the following fields:
o     Requirements for materials to be provided in subcontracting
o     Dependent order reservations on the basis of production orders
o     Dependent order reservations on the basis of maintenance orders or networks
o     Release orders
o     Purchase requisition releases
o     Forecast delivery schedules
regards,
sikkandar basha

Calculation of Safety Stock and Reorder Point under Forecast Model T

Hi Gurus!
Happy Holiday!
I would like to ask for your assistance on how the the safety stock and reorder point was calculated with the following values available. I would really appreciate it if you could give me details on the calculation.
Below are the values:
Basic data
Forecast date        01.12.2009        Unit                  CTN
Forecast model       T                 Service level         0.0
Period indicator     M                 Paramtr profile
Control data
Initialization                                Tracking limit        4.000
Model selection      A                 Procedure selection   2
Parameter optimizatio                Optimization level    F
Alpha factor         0,10               Beta factor           0,10
Gamma factor       0,00              Delta factor          0,30
Basic value           5.464-           Trend value          5.603-
MAD                      4.758            Error total              4.722
Safety stock         1                   Reorder pnt.          1
No. of values
Consumption           6                Forecast periods       1
Initial. periods      0                Fixed periods          0
Periods per season   12
Historical data
Period                Original     Corrected value
11.2009                3.000              3.000
10.2009                0.000              0.000
09.2009                0.000              0.000
08.2009                9.000              9.000
07.2009               21.000             21.000
06.2009               20.300             20.300
Forecast results
Period                Original     Corrected value
12.2009                0.000              0.000
Appreciate your assistance!
Thank you and Happy Holidays!
Ji

Sweth, you are asking for consulting, and in my opinion it is way beyond what can or should be reasonable to achieve in such a forum. You are asking complex questions, that most probable have more than one possible answer.
I suggest that you get on-site help from a knowledgeable and experienced consultant. These are crucial business issues, and should be dealt seriously.

Forecasting formula calculation in Automstic reorder point plannig

Dear Experts,
We are using R/3 ECC 6.0 we want to implement Automatic reorder point planning. for this basic settings i know.
suppose i taken 430,590,350,490,495,520 value for hitsory from Jan 2009 as conusmtion value for testing purpose.
My history periods is 6 & forecast period is 6,Initialization periods is 6. Alpha factor is 0.1 & Beta is 0.2, Tracking limit is 4.00 & Forecast model is T. can any one tell me how it is calaculted basic Value, MAD, Trend Value are calculated for trend or seasonal model.
Thanks in advance, awating for ur valuable reply.
Best Regards,
Dev

HI
AS YOU SAID , THE INITIATION PERIOD WILL NOT BE SAME FOR ALL THE FORCASTING METHODS. PLS
GO AND USE THE APO LIBRARY.

Dependant requirements are to be considered in reorder point planning

Hi,
We are currently using safety stock planning with PD.but the problem is that MRP triggers a procuement proposal when ever the availabile quantity(not the stock) falls below safety stock(as it considers MRP elements like DEP REQ etc in the net requirements calculation).
Now if i propose VB,it does not consider the dependent requirements at all(they are not even displayed)
Requierment is that the procurement proposals should only be triggered when the safety stock falls below the physical stock and DEPREQ's and all other requirements should still be displayed.
I appreciate your help in getting me through with this.Thanks.
Ram

Dear Ram,
go to the customizing of MRP type ,
ther you will find the field 'Reorder point planning with external requirements'
Indicates whether an external requirement (sales order or manual reservation) is included in the net requirements calculation for reorder point planning.
If yes, you can decide whether it is to be included:
-in the complete planning horizon, or
-only within the replenishment lead time
I hope the above information will be useful,
best regards

Rescheduling in Reorder point planning V1

Hi,
I have a requirement for a material 2/7/2009 and I do not have any stock for it. The MRP type for it is V1 (Manual reord.point w. ext.reqs) and reorder point is 85.
Now when I run MRP today ie., 4/1/2009, a planned order with a date of 4/7/2009 is generated without rescheduling date or exception.
Why is the planned order without rescheduling date or exception?
Sincerely,
Ketan

Hi,
When planning with reorder levels, system generates the planned orders but it would not give an exception message. This is due to the fact that with reorder level planning, you are trying to replenish the stock by maintaining the stock levels & you are not looking at any particular demand or requirement to be included in the MRP calculations. As you mentioned erlier that running with MRP type PD it gives out excpetion messages as MRP there is looking at the requirements & gives out exceptions.
Hope this explains the reasons for not getting the exception messages.
Regards
Vineet

Decimal place rounding - reorder point

Dear experts,
Can you please advise , how can I confirm that the reorder point will be displayed without decimal point (rounded).
for example in place 79.67 > 79, in place 80.43>80.

How is the reorderpoint determined? manually entered or automatically calculated and set by SAP?
What is your base unit of measure? does it allow decimals, if yes, why do you want then the reorder point rounded?
If you dont want broken quantities reordered, then you should enter a rounding or a rounding profile in material master MRP view. Or define exact quantities to be reordered.

Automatic reorder point and safety stock caluclation- MRP type:V2

Hi,
I want the system to calculate reorder point and safety stock. To simulate this i created one material with
MRP type:V2, service level as 97%, Forecast model:D,Hist. period:12,Forecast periods:12, and I entered
the historical value for past 12 months as 100 nos in material master.
04.2009     100
03.2009     100
02.2009     100
01.2009     100
12.2008     100
11.2008     100
10.2008     100
09.2008     100
08.2008     100
07.2008     100
06.2008     100
05.2008      100
Then I went to MP30 and executed the forcase.When I checkd the material master the system has calculated the reorder point as 14 nos. But there is no value updated in safety stock field.
Now I have two questions.
1) How the system has arrived the reorder point value as 14 nos.
2) Why there is no safety stock updated in material master.
Could u please clarify this.
Thanks and Regards
Purushothaman

Hi,
This is further to my preivous mail. I have changed the consumption values and now i am getting the safety stock.
MRP type:V2, service level as 97%, Forecast model:D,Hist. period:12,Forecast periods:12, and I entered
the historical value for past 12 months as.
04.2009     100
03.2009     80
02.2009     110
01.2009     85
12.2008     90
11.2008     95
10.2008     125
09.2008     90
08.2008     90
07.2008     92
06.2008     101
05.2008     100
After executing the forecase the sytem has calculated the below parameter.
Basic value:95.759
MAD:11.448
Safety stock:10.252
Reorder point:23.658.
Can anyone explain me how these calculation arrived.
Thanks and regards
Purushothaman

Reorder point

HI Gurus,
Can anybody please help me with this problem. There are about 1600 MRO items which i have setup for running mass forecast in MP38. This job runs in the background every monday. But after some time, the reorder point is again coming back to zero. Why could this be happening. Any ideas to start to debug this one, The MRP type is VM. All these materials have some histroy of atleast 1 EA of consumption in the last 30 months.
The settings on the forecasting view are Forecast model - D (constant model), Histroical periods 30. Forecast periods - 3,
Period indicator - M,(month), Initialization - X, tracking limit - 4.000, Reset automatically checked, parameter optimization checked, Selection procedure - 2 . Here is an intersting thing. Today when the forecast job ran, the forecast model (D) which was populated is blank in the forecast model feild. But if i were to run the forecast on this material now via MM02 or MP38 again, i will definitely see the reorder point again. But next week again when the job runs for siome reason the reorder pioint is zero againa. this is problem with only a set of 1600 materials . All the ither 5000 MRO items which have VM reorder point are good. Any thoughts or ideas so that we could attack this problem please?
One other thing, the service level is zero for all these 1600 materials which are having a problem, where as the materials which have no problem have some service level of 90 to 95 dpending on the material, there i do see that there is safety stock calculated and also the reorder point. So maybe in these 1600 matertials, the consumption in hte past histroy is so low that when the system runs forecast it is not able to move up the reorder point and safety stock. could that be the reason?
Thanks
ANusha
Edited by: anusha vemulapati on Apr 4, 2011 3:56 PM

Hi Anusha,
It is very likely that if you are running a Forecast with:
The settings on the forecasting view are Forecast model - D (constant model),
Histroical periods 30.
Forecast periods - 3,
Period indicator - M,(month)
And you have almost no consumption of that material the Forecast value = 0 (You can check if this is the case)
Do you have almost 3 years of backward history? If not I would suggest you to reduce the Historical period value!!. (Beacuse 30 month if you do not have history will reduce your forecast value.
IE consumption of the material = 30 units,
Created = Last Month
Forecast value = 30Units/30 Month = 1 Unit per month!!!
If your historical value is only 1 month then the value = 30
Another suggetion: If you have periods with cero consumption instead of using D constant, try using G, because D model is too much dependant on the consumption of the period before the forecast.
Hope I helped you.
Kind regards,
Federico

Reoder point calculation don't give the expected result

Dear friends,
We are using CBP to set reorder point (MRP type is VM).
We've set the planned delivery time, on MRP2 view, as 120 days.
When we run the forecast, the calculated basic value gives the expected
result, but the reorder point don't.
As we've set Planned delivery time as 120 days, we expect that the
reorder point is "basic value"*4 (4 is the result 120/30). But the result
of the reorder point is is greater (aprox. "basic value"*4,5).
Can you please give me a help on this matter?
Many thanks,
Afonso Pereira

you may get your expected result if you would use VB instead of VM.
Manual Reorder Point Planning
In manual reorder point planning, you define both the reorder level and the safety stock level manually in the appropriate material master.
Automatic Reorder Point Planning
In automatic reorder point planning, both the reorder level and the safety stock level are determined by the integrated forecasting program.
The system uses past consumption data (historical data) to forecast future requirements. The system then uses these forecast values to calculate the reorder level and the safety stock level, taking the service level, which is specified by the MRP controller, and the material's replenishment lead time into account, and transfers them to the material master.
Since the forecast is carried out at regular intervals, the reorder level and the safety stock level are continually adapted to the current consumption and delivery situation. This means that a contribution is made towards keeping stock levels low.

MRP TYPE IN REORDER-POINT PLANNING

Hi
I would like to know the difference between the V2 and VM MRP type in the individual Material Master record.
Because, for me, both are for Automatic Reorder-Point Planning and I don't know which I have to choose.
Thanks in advance.
Best regards.

Forecast program is used to calculate reorder point.
check this document
[http://help.sap.com/erp2005_ehp_03/helpdata/EN/f4/7d257044af11d182b40000e829fbfe/content.htm]
Even when you the calculation is based on past consumptions, in the forecast view you maintain parameters for tendency (seasonal, etc), how many periods are to be taken into consideration and you may also manually adjust consumption quantities. You may refer consumptions to other materials (i.e. when you have a new material code, replacing an old one, you can use this old one historical consumption data to calculate reorder point).
Hope this helps

Reorder point in PD

can i use reorder point with mrp type PD.
when i am trying to put a reorder point its giving me a warning like thing,
Reorder point considered only with reorder point or time-phased planning.
The system does not reset the reorder point because you can define in Customizing for Consumption-Based Planning that the reorder point is calculated automatically for any MRP type.
i went in to the configuration and set the indicator to reorder point in the pd configuration.
but not showing any impact.
can some one sove this.

Hi,
You cannot use reorder point planning with MRp type PD system gives a message: Reorder point considered only with reorder point or time-phased planning.
If you want to use something with PD use 1) safety stock 2) Minimum lot size so that the particular qty. can be ordered.
Try once .
If helpful award points.
Regards

Difficulties in Reorder point calculation

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